Renewable energy sources leasing funding underway – Unexploited potentials for procurement of medical and IT equipment as well as “governmental" vehicles

Leasing companies in Serbia are very successful although this field is still very young. I hope leasing will reach a record 2008 when the industry generated a billion euros to the Serbian market, the President of the Executive Board of S Leasing and one of the heads of S-Rent, Vladimir Pajovic, has said today.

After ten years of operations of these companies in Serbia, Pajovic said that so far they signed more than 17.000 contracts totaling EUR 440 and that they are expecting an annual growth of 10-15%.

- We are expecting a recovery of important industrial fileds to whom leasing is the first option, such as transport and constriction industry -Pajovic says.

The largest number of contracts refers to funding of purchase of passenger cars (33%). Then purchase of trucks and buses (29%), industrial facilities and machines (22%) follow.

- Also, replacement of cars and agricultural machinery will cntinue and leasing industry has enough potential and experience to support these industrial branches. Apart from that, stake o leasing industry in the development of the renewable energy resources is a challenge worth exploring and the first contracts – Bojan Vracevic, a member of the Executive Board in S-Leasing and the General Manager of S-Rent, added.

Renewable funding sources

The Secretary General of the Association of the Leasing companies in Serbia,Teodora Milenkovic, is optimistic about this issue.

(Vladimir Pajovic)

- During the first six months this year, we launched vehicles and equipment totaling EUR 136 mil, which is 7, 4% more than 2012. While cars were purchased during the previous years, the product range has changed, agricultural machinery, buses and freight vehicles are most common. This also includes real estate and equipment for SMEs.

Milenkovic believes that new results due by the end of the month will demonstrate growth.

The Secretary General of the Association of the Leasing companies in Serbia announced for eKapija that by the end of the year, the first leasing inflow in the renewable energy sources is expected.

The state (does not) take (s) vehicles on leasing

Experiences from the region show that although leasing market is recovering slowly, there is a room for progress, especially when it comes to new products.

For instance, leasing companies in Croatia has been operating relatively for a short period of time, since 1997. Still, leasing industry makes 17% of the total country financial market. Like us, more than 60 % of the product range went to purchase of passenger and commercial cars.

Darko Urukalovic, from the Association of Leasing companies in Croatia and the managing board member of Croatian S-Leasing says that, after joining the EU, a couple of legislation changes occurred which, he added, Serbia would experience for sure.

- It is particularly important that now there is an option for leasing to join investment projects, that is, to be the part of public privatepartnerships, funding renewable energy sources and alike – Urukalovic said.

Sectors of agriculture, IT as well as medical equipment make a large market for leasing contract placement are s- Urukalovic says.

The state in Croatiais also a serious leasing customer which Urukalovic sees as a potential for Serbia.

Representatives from the Association of the leasing companies in Serbia say that our country “did recognize leasing”. However, it seems that our country has money and would not like to become indebted as ordinary people since public institutions rarely opt for purchase of cars and equipment this way.

Milenkovic says that they have closer cooperation with the state when it comes to legislation framework. She hopes that more intensified cooperation this year will result in changes moving towards cancellation of VAT to the interest rate as well as amendments to the Tax Law on profit of legal entities where tax credit should be acknowledged as well as it is with banks.

J.DJ.